Sectional title living has become increasingly popular among South African buyers, with annual property inflation for sectional titles outperforming freehold properties at the end of 2023, according to Lightstone Property. Yet, despite its appeal, many buyers overlook the crucial role of the trustee and the Body Corporate - a misunderstanding that can have costly consequences.
Understanding the role of a trustee
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, explains that many young homeowners volunteer as trustees without fully understanding the responsibilities. “Many buyers don’t realise they can be held personally liable for certain failures regarding the management of the complex. It’s important to understand this before taking on the role,” says Goslett.
He recommends familiarising yourself with the Sectional Title Schemes Management Act before buying into a sectional title scheme. “Owners may be held liable for the debt of the Body Corporate. That’s why it’s crucial to assess whether the scheme is managed correctly and to review financial statements before purchasing,” he adds.
Key Trustee Responsibilities
Some responsibilities include:
- Fiduciary duty: Trustees must act in the best interests of the Body Corporate, handling money, property, and decisions responsibly.
- Avoiding conflicts of interest: Trustees cannot prioritise their own property over others in matters like maintenance.
- Liability for breaches: Trustees acting against their fiduciary duty may be held accountable for any resulting loss.
- Approval for deviations: Any actions outside standard procedures require written approval from all members of the Body Corporate.
Goslett adds: “Being a trustee can be a thankless job, but it also offers insights into the running of the complex and peace of mind knowing it is well managed.”
Body Corporate Responsibilities
Andrew Schaefer, MD of Trafalgar Property Management, explains the shared responsibilities of a Body Corporate:
- Administration and governance: Establishing and enforcing rules, holding at least one annual general meeting, and electing trustees to implement decisions regarding budgets and management.
- Maintenance and repairs: Overseeing the upkeep of common areas such as gardens, walkways, and amenities like swimming pools or gyms. This includes routine maintenance and long-term planning for major items, such as lifts.
- Financial management: Collecting levies, paying municipal accounts and creditors, creating and approving budgets, keeping financial records, arranging annual audits, and ensuring adequate insurance.
- Dispute resolution: Addressing disagreements between owners regarding noise, pets, parking, washing on balconies, property alterations, or compliance with rules. Unresolved disputes can be referred to the Community Schemes Ombud Service for mediation or adjudication.
Understanding these roles and responsibilities is vital for anyone considering sectional title ownership. Being informed helps ensure both personal accountability and the smooth running of your complex.
